Tuesday, March 30, 2010

In-N-Out Burger may not be a household name, but it's as close as possible without being a national chain.

Their business model is based on keeping everything unbelievably simple, from their supply chain, to their service operation, to their marketing.

They execute relationship marketing simply and well, having identified a base of committed, profitable customers, and focusing almost every communication on this critical group. But their core customers have been highly leveraged by In-N-Out, making them a national cult brand by spreading positive word of mouth.

What you’ll notice at In-N-Out Burger is that the experience is different for their base than it is for casual or new customers.

Where Outsiders see a small menu with few options, Insiders see familiarity. They feel trust in their adherence to a basic menu and confidence built by years of consistent service. In-N-Out has never compromised on quality ingredients, and never tried to sell their customers a pizza or a snack wrap.

For Insiders, In-N-Out provides social familiarity and the perception of special treatment provided by their “secret menu”. Like the Starbucks customers who recognize in others the ability to properly order a complex coffee beverage, In & Out customers acknolwedge an informal social circle for customers who order “animal style” or recognize a “Flying Dutchman” when they see one. The secret menu provides an experiential privilege to Insiders able to customize their experience using knowledge in a way that Outsiders who simply read the menu cannot.

In-N-Out treats their core well, and in their core returns the favor through loyalty, profit and word-of-mouth advertising. They pay nothing to market to me. In fact, they're completely absent from my market, yet they're top-of-mind as a meal destination when I travel to California because of their ability to get paying customers to be their word-of-mouth marketers.

As far as experiences go, I don’t appreciate In-N-Out to the level that their many raving fans do.Yet I still stop every time I’m in California, mostly because of the word-of-mouth and the promise of a consistently good experience. With enough of these consistently delivered experiences, social benefits and special treatment, I too may in time become an Insider.